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Page 1 Development Permit DP 4889 Direct Testimony of Abigail Krich June 10, 201 I STATE OF MAINE LAND USE REGULATION COMMISSION CHAMPLAIN WIND, LLC BOWERS WIND PROJECT DEVELOPMENT PERMIT DP 4889 PRE-FILED DIRECT TESTIMONY OF Abigail Krich ON BEHALF OF C ON SERVATION LAW F OLINDATION Introduction My name is Abigail Krich. I am President of Boreas Renewables, a consulting company that provides technical assistance and advice regarding renewable energy and the electric power infrastructure. As indicated on my Curriculum Vitae, attached to this testimony,I hold a Master's of Engineering Degree in Electrical and Computer Engineering with a focus on power systems from Cornell University as well as a B.S. in Biological and Environmental Engineering, Environmental Option, from Comell University. I have worked in the renewable energy industry in varying capacities since 2003. Since 20061 have managed the technical aspects of various renewable generation project developments, including handling interconnection and electricity market issues with independent system operators such as ISO-New England. I also perfonn regional transmission planning and energy market desiga advocacy for a regional renewable energy trade group. Summary The purpose of my testimony is to highlight the positive economic and environmental impacts that wind energy has in Maine. Electrical generation and consumer demand for electricity must be balanced at all times as there is very little electrical storage available. Therefore, when wind energy is produced, it must displace energy that would have been produced by another source. Wind has almost no marginal cost for producing electricity once it is built so it typically acts as a price-taker in the wholesale electricity markets. Price-taking energy, like wind, displaces more expensive energy in the markets, keeping power prices low. Fossil fuels produce the majority of electricity in New England and represent over TAYo of the electrical generating capacity in the region. Wind primarily
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Page 1: in Load - Maine.gov displaces natural gas and oil more wind is installed. Development Permit DP 4889 Direct Testimony of Abigail Krich June 10,201 1 and will displace increasing amounts

Page 1 Development Permit DP 4889Direct Testimony of Abigail Krich

June 10, 201 I

STATE OF MAINELAND USE REGULATION COMMISSION

CHAMPLAIN WIND, LLCBOWERS WIND PROJECTDEVELOPMENT PERMIT DP 4889

PRE-FILED DIRECT TESTIMONY OF

Abigail Krich

ON BEHALF OF

C ON SERVATION LAW F OLINDATION

Introduction

My name is Abigail Krich. I am President of Boreas Renewables, a consulting companythat provides technical assistance and advice regarding renewable energy and the electricpower infrastructure. As indicated on my Curriculum Vitae, attached to this testimony,Ihold a Master's of Engineering Degree in Electrical and Computer Engineering with afocus on power systems from Cornell University as well as a B.S. in Biological andEnvironmental Engineering, Environmental Option, from Comell University. I haveworked in the renewable energy industry in varying capacities since 2003. Since 20061have managed the technical aspects of various renewable generation projectdevelopments, including handling interconnection and electricity market issues withindependent system operators such as ISO-New England. I also perfonn regionaltransmission planning and energy market desiga advocacy for a regional renewableenergy trade group.

Summary

The purpose of my testimony is to highlight the positive economic and environmentalimpacts that wind energy has in Maine. Electrical generation and consumer demand forelectricity must be balanced at all times as there is very little electrical storage available.Therefore, when wind energy is produced, it must displace energy that would have beenproduced by another source. Wind has almost no marginal cost for producing electricityonce it is built so it typically acts as a price-taker in the wholesale electricity markets.Price-taking energy, like wind, displaces more expensive energy in the markets, keepingpower prices low. Fossil fuels produce the majority of electricity in New England andrepresent over TAYo of the electrical generating capacity in the region. Wind primarily

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displaces natural gas and oilmore wind is installed.

Development Permit DP 4889Direct Testimony of Abigail Krich

June 10,201 1

and will displace increasing amounts of coal electricity as

The New England Wind Integration Study (NEMS), performed by ISO New England,found that no additional power plants would be needed to balance the additionalvariations expected from up to 12,000 MW of wind energy in New England. This isequivalent to approximately 24% of the annual regional demand for electricity being metby wind energy. For comparison, rr/ind energy produced 1% of New England'selectricity in February 2011. NEWIS found that up to 12,000 MW of wind could beintegrated without the need for additional electrical storage. NEWIS also found that if20% ofNew England's electricity were supplied by wind it would reduce the region'selectricity-related COz emissions by 2504, SO* emissions by 6Yo, and NO* emissions by26%.

Generation, Load, and the Grid

Electrical generators produce power that is fed into the transmission system, also knownas the grid. Consumers of electricity, known as load, take power from the grid. The gridis composed of transmission and distribution lines that connect and transmit electricitybetween all of the generators and load on the system.

With the exception of northern Maine which is electrically connected to New Brunswickrather than southern Maine, all of the generators and load in New England are tiedtogether electrically by the grid. This means that the electrical performance in one part ofthe system affects all areas of the system. The New England electrical system seryesapproximately 14 million people with over 300 generators and is connected by over 8,000miles of high voltage transmission lines.l

Load Must Equal Generation

The high voltage backbones of the New England grid are managed by the IndependentSystem Operator of New England (ISO-NE). To operate reliably, the amount of powerbeing put into the grid by generators and the amount of power being taken from the gridby load must be balanced at all times.

Because the load in New England is constantly fluctuating, the fleet of generators mustmatch their production to the load fluctuation in order to produce exactly the amount ofpower that is being consumed at any point in time. The process of telling generators toturn on or offand how much electricity to produce at what time is managed by ISO-NE.They manage the system and determine which generators are needed and when they areneeded based on a load forecast.

t ISO New England Regional System PIan 2010 (RSPl0) atpage 15-16. Regional System Plans arereleased annually and are available at http://iso-ne.cor,ritrans/rsp/index.htrnl.

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Page 3 Development Permit DP 4889Direct Testimony of Abigail Krich

June 10, 201 1

Variations in Load

There arc annual variations in load which mean that some generators are only used duringcertain parts of the year, typically in the summer when New England load is at its highest.There are daily variations in load that must be matched by turning some generators onand offduring the day (called unit commitment) and having other generators ramp theiroutput up or down over the course of the day to match the trends in load (called loadfollowing). There are also second-to-second and minute-to-minute variations in load thatcannot be predicted but must be matched by generation. A select number of generatorsreceive automated signals from ISO-NE to balance those very quick variations (calledregulation).

ISO-NE also needs to maintain a specified level of reserve generation at all times to beable to respond to errors inherent in the load forecast. If the load is higher than expected,these reserves are dispatched (instructed to produce power) to make up the difference. Ifload is lower than expected, ISO-NE tells generators to reduce their output or even turnoff.

ISO-NE is not concerned with the precise amount of power each individual load isconsuming. They do not dispatch individual generators to follow the pattems ofindividual loads. The load patterns of an individual house would look very erratic withhuge shifts from one moment to the next as lights and appliances are switched on and off.ISO-NE only needs to pay attention to the system load and make sure the generation fleetas a whole balances the system load. Because the 14 million people being served byISO-NE do not turn their lights and appliances on and offin synch with each other, thetotal system load appears much more smooth than the load of an individual house. Windenergy, as described later on, is very similar in this respect.

Wind Operates as a Price-Taker in Wholesale Markets

ISO-NE operates competitive energy markets to meet the electric demand. This is donethrough an auction process in which ISO-NE selects the electricity suppliers that canmeet the demand most cost effectively. By bidding in their variable cost of energy (fuelcost, variable operations and maintenance, start-up cos! and emissions cost), ISO canselect the generators that will produce the needed electricity at the lowest cost. Capitalcosts are not considered in these bids. Typical variable costs by generator type are:2

. Wind: less than $0.01lkWh

. Hydro: less than $0.01/kwh

. Nuclear: $0-01/kWh

2 Final Reporf New England Wind Integration Study, Prepared for ISO New England, Prepared by GEEnergy Applications and Systems Engineering, EnerNex Corporation, and AWS Truepower. December 5,2010. Available at http://iso-ne.comr'cornmilteesicomrn:wkgrps/prtcpnts comm/pacileports20l0/newis*report.pdf (NEWIS) page259.

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Page 4 Development Permit DP 4889Direct Testimony of Abigail ttuich

June 10, 201 I. Coal: $0.03 - $0.06&Wh. Combined cycle natural gas: $0.05 - $0.07lkWh. Gas turbine: $0.07 - $0.15/kwh. OiVGas steam turbine: $0.15 - $0.23lkwh. Oil combustion turbine: $0.23 - $0.37lkwh

These costs assume relatively low natural gas fuel prices, but can vary widely as fuelcosts fluctuate. Regional gas prices are extremely volatile. They averaged$5.00iI\{MBTU in the summer of 2010 but were as high as $15.00/IvIMBTU in thesummer of 2008 (pushing up average Maine real time energy prices to $0.103/kWh).Because nafural gas is so often the fuel that sets the clearing price in New England, theprice of electricity in this region closely tracks natural gas prices.

Since wind energy does not have a fuel cost and has minimal operations and maintenancecosts,3 its variable cost of providing energy is lower than that of any electrical powerplant that must purchase fuel to produce electricity. For this reason, wind typicallyoperates as a'oprice-taker" in the wholesale energy markets, bidding in the equivalent of$0/1\{Wh to produce energy.

The highest price bid that is selected by ISO-NE sets the price that all generators are paidfor their electricity. When demand for electricity is low, ISO is generally able to meet thedemand with all low-cost generators. When demand is high or many of the low costgenerators are not available,ISO has to reach higher up the list to meet the demandresulting in higher electricity prices. For context in April20l l the average Maine realtime energy price was $0.042lkwh because April is generally a low-demand month.However, on April 13th at I p.m.the real time energy price topped out at $0.313/kWh.4

Price-taking energy like wind will always clear in the market and displaces the need topurchase energy from the most expensive generators. It has the same effect as reducingthe demand for electricity and helps keeps energy market clearing prices low.

Not all energy is purchased in wholesale markets. Much of it is purchased throughbilateral contracts or power purchase agreements that may or may not be below marketrates. Because wind energy projects are capital intensive, they typically look for long-term energy contracts to guarantee energy payment levels.

In 2009 the Maine Public Utilities Commission approved a twenty-year contract betweenCentral Maine Power and Bangor-Hydro-Electric Company and First Wind's RollinsWind Project. This contract specified that the energy would be sold at a specifieddiscount from the actual market price with a floor price of $0.055 - $0.065/kwh and acap of $0.1101kWh. NSTAR selected three New England wind projects as part of the

'Average wind O&M costs are equivalent to $0.0I/kWh. 2009 Wind Technologies Market Report, U-S.Departrnent of Energy, Energy Efficiency & Renewable Energy. August 2010. Page 54. Available at:http://www I .eere.energy.gov/windandhydro/pdfs/2009:windJechnologies:market:report.pdf&id-43814 http:i/iso-ne.comirnarkets/hstdatar'zn I info/index.html.

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Page 5 Development Permit DP 4889Direct Testimony of Abigail Krich

June 10, 201 I

2010 Massachusetts RFP for long-term renewable energy contracts. Pricing details havenot been disclosed, but speculations are that the price is below $0.10/kWh.

Whether these long-term contracts end up being above or below market rates depends onfuel prices over time. What they do provide is certainty. Unlike wind, a fossil fuel powerplant cannot guarantee its fuel prices five or ten years down the road so it cannot lock in apower sale price. In June of 2008, when natural gas prices were three times what they aretoday, the Maine real time energy price averaged $0.103/kWh and topped out at

S0.400/kWh. In a market like that one, these long-term wind energy contracts would beconsidered bargain-basement prices.

All energy purchased through these types of bilateral contracts still needs to be accountedfor by ISO-NE and is generally entered into the wholesale market as a price-taker.Therefore, regardless of the long-term contract price, wind energy can still suppressmarket prices for the energy that has not been purchased througb contract. In this way,long-term contracts for wind can also reduce regional energy prices indirectly.

Wind Enerry Can Reduce Electricity Prices

The experience Texas has had with wind energy seryes as a model for what Maine mightexpect. Wind development in Texas has predominantly occurred in the western part ofthe state while the major load centers are in the eastern part of the state. Due totoansmission constraints for power flows between the western and eastern parts of thestate, the westem regions have become export constrained. This is not entirely dissimilarfrom the situation Maine is in with the rest ofNew England. Maine is also exportconstrained and holds the potential for the majority of on-shore wind development inNew England.

In January 2011, the Public Utilities Commission of Texas released a report to the TexasLegislature on the scope of competition in electric markets in Texas.s The report findsfrom Texas's operational experience that balancing energy market prices "are typicallylower in the West zone because the West zone is export constrained and prices withinthat zone are affected by the large amount of low-cost wind energy.'6

We have already seen a similar impact of wind energy on pricing in Maine. On May 25,2011, First Wind announced a Power Purchase Agreement (PPA) with New BrunswickPower to sell the energy from their Mars Hill project for four years. New BrunswickPower had won the opportunity to provide standard offer service to all customer classesin Northern Maine earlier this year by offering a reduction in electricity prices of 10 toZlYo. The use of locally-produced wind power as one of the energy sources being usedwas cited as one reason for the decrease in Northem Maine consumers' energy bills.

5 Scope of Competition in Electric Markets in Texas, Report to &e 82od Texas Legislature. Public UtilitiesCommission of Texas, January 201l. http:/iwww.puc.state.tx.us/electric/repor-ts/scope/index.cfmu Scope of Competition at page 53.

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Page 6 Development Permit DP 4889Direct Testimony of Abigail Krich

June 10,2011

The Need For New Electric Generation Capacity

While New England is currently long on electrical capacity, it will still need additional

capacity to be added over the coming years to meet load growth and make up for unitretirements. ISO-NE predicts the New England stlrnmef peak load will grow at a

componnd annual growth rate of 1.4% between 2010 and20l9.7 ^Over 230A MW of

generation capacity in New England is more than fifu years old.s Though it is not

known when these resources will retire, they will not be able to operate indefinitely. It isalso unclear how long the oil-fued generators (representing 12.6% of New England'sgeneration capacity) can continue generating at current levels (less than 1% of NewEngland's electrical energy generation) before they will need to retire.

Fossil Fuels Used for Electricity Production in New England

Fossil fuels produced 55Yo of the electric energy used in New England inZA09, compared

with6go/onationally.e While New England's energy mix and emissions are relatively

cleaner than the national average, &e majority of our power is still being produced bycarbon-emitting fossil fuels.

While the rest of the nation has long-since almost completely stopped generating

electricity from oil, New England is unique. Generators fueled primarily by oil make up

21.5% of New England's sunmer capacity mix and an additional 17.6% consists of dual-

fuel units that can bum natural gas or oi1.l0

Because the price of oil has increased and the price of natural gas has decreased in the

last couple of years, oil produced a mere 0.7% of the electricity in New England in2009.11 However, the price differential between oil and other fuels has not always been

this high. As recently as 2005, oil-fired units were responsible for 4.6Ya of the electricifproduced in New England, and units that burned oil and natural gas (dual-fuel units) were

responsible for 12.6o/r.t' If the price of natural gas were to rise again to be near or above

the price of oil, we would aknost certainly see a rapid increase in the percent of ourelectricity produced with oil.l3

t RSPto page23.8 Table 2.1,2011-2020 Forecast Report of Capaciry, Enerry, Loads, and Transmission, April 2011, ISO-

NE. http://iso-ne.com/trans/c elt/repafi/2A ll /index.html.eRsPlo page93.to RSPI0 page99.It RSPlo page92-93.t2 RSP06 page 52.tt The ISO New England Regional System Plan 2005 states: "An increasing energy use and rising natural

gas prices relative to oil prices will tend to increase generating plant production by oil units, resulting in

higher total air emissions in New England over the l0-year period. Conservation efforts and renewable

resourc€s will reduce emissions and encourage greater fuel diversity." (RSP05 page 20).

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PageT Development Permit DP 4889

Direct Testimony of Abigail KrichJune 10, 201 1

Wind Enerry Displaces Fossil Fuel Enerry

As discussed above, generation must always match load and each type of resource is

another tool in ISONE's toolkit to maintain this balance. Wind energy is not an

exception. When wind energy is produced and fed onto the grid it must displace energy

that would have been produced by another generator. Because ISO-NE uses economics

to determine which plants should produce power, wind energy will displace the most

expensive energy that can be backed doun without violating reliability standards. The

New England Wind Integration Study (NEWIS), discussed later, found that wind inNewEngland would primarily displace energy from natural gas combined cycle generation, as

this is typically the most expensive and flexible generation on the system. Withincreasing quantities of wind installed, NEWIS also showed limited but increasing

displacement of coal energy. Although there is very little generation from oil at this timein New England, the wind scenarios in NEWIS all appear to displace the little oilgeneration that there would have been.la

Figure 1 and Figure 2 show the simulated dispatch for one peak-load week with and

without wind generation. The lightest blue color represents peaklng oil-fired steam

turbines. There is a fair amount of energy produced by the oil peakers in the no-windsimulation, but this is almost entirely eliminated in the 20% wlrlrd simulation.

'u NEWIS at pages 221,262,294,297,302, 303, 304, 306, 307 and Overview of ISO New England and

Near Final Results of the New England Wind Integration Study, Bill Henson, ISO-NE. NEWEEP WindIntegration Webinar, October 26,201A. Slide 27. Available at:

http://wrvw.windpoweringamerica.gov/newengland/filter:detail.asp?itemid:2837

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Ob*chtlel*.Sto Argrltt{* tlo gtt.'' l{*vr LotdP.C(

o7r2a r?Fr.l 07r?7 11p6, 07/?8 l:PM *ir?q

Page I Development Permit DP 4889Direct Testimony of Abigail Krich

June 10, 201 I

-I

ri L ['r{.111'.rr. t.,,Ijt

-

1,,, . I r. rirrfi {1

a*.,=$a,oucEo(E;:o$J5l(tr(E.=oao.

Figure I R{EWIS rlisp:rtch simulation results for a peak load *'"-k -"iih nn *'i"C**

15 Overview of ISO New England and Near Final Results of fhe New England Wind Integration Study, BillHenson, ISO-NE. NEWEEP Wind Integration Webinar, October 26,2010. Slide 27. Available at:http://www.windpoweringamerica.gov/newengland/filter:detail.asp?itemid:2837 . (NEWEEP) slide 23.

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Page 9 Development Permit DP 4889Direct Testimony of Abigail Krich

June 10, 201 IOtrpd€h tor Jut.25 to Augurl{2 Brll cn:horc. Nrdv! Lord P.rt

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\ilind Power Variability

Wind power output varies primarily with wind speed. Bscause wind speed is constantlychanging, there is inherent variation in the power output from wind plants. Wind speedsare location-specific and wind speeds vary from one location to another. Even within anindividual wind plant there will be variations in the wind speeds from one wind turbine toanother and some wind turbines may be increasing power productions when otherturbines in the same project are decreasing. From one wind plant to another, this spatialvariation effect is even stronger and the output from one plant to another correlates moreweakly the further apart they are.t1

An empirical study of long-term high resolution wind speed data performed by the USDepartment of Energy's National Renewable Energy Laboratory's National WindTechnology Center showed that "despite their close proximity, instantaneous outputsfrom individual turbines of a large wind farm are not synchronized. Physical separationsand differences of local terrains cause wind speeds at each turbine to vary."l8 Further,"as more and more wind generating plants over a wider area are integrated into the grid,

tu NEWEEP slide 24.

" Wan, Y. (2005). Primer on Wind Power for Utility Applications. 45 pp.; NREL Report No. TP-500-3623A. http:i/wlv,uv.nlel.gov/docsilyO6osti/36230.pd1. (Wan) at page 15.

'* Watt atpage 13.

a=JaotCEo(!'€osJ:Jl<E(E.=oao-

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Page 10 Development Permit DP 4889Direct Testimony of Abigail Krich

June 10, 201 I

spatial diversif of the wind resources will make the overall wind power much less

volatile than the output from any individual wind farm."le

The New England Wind Integration Study (NEWIS)

ISO-NE released the final New England Wind Integration Sfudy (NEWIS) in December2010.20 This two-year effort looked into the operational impacts of integratingsubstantial amounts of wind generation into the New England system. It studied anumber of scenarios including approximately 2.5Yo, 9Vo, l4oA,20o/o, and 24Yo of annualelectricity demand being met by wind energy (1,140 MW to 12,000 MW installedwind).2l These study levels do not represent the amount of wind that is expected orpossible within New England, but they are usefirl for answering a number of hypotheticalquestions relevant to the long-term system planning process over a range of potentialfuture scenarios.

The NEWIS results showed that, with the current fleet of existing generation and demandresponse resources, New England could integrate even the highest levels of wind energystudied. Even when looking at 12,000 MW of wind energy on the system, no additionalgenerators would be needed to balance the variations in wind energy output. The studyassumed that there would be no major attrition of existing generators or demand-sideresources and that these existing resources would remain available to provide systemflexibility.22

Due to the variable nature of wind, many people expect that electrical storage is neededin order to "smooth out" wind power generation to make it look like the output frommany conventional generators. Except in the case of small island systems such asHawaii, this is generally not the case. In New England we have a number of pumped-storage hydro facilities that are used for electricity market arbitrage. When electricityprices are low, these facilities consume electricity by pumping water uphill to a storagereservoir. When electricity prices are high, these facilities produce electricity by runningthat same water downhill and through a turbine. This is the only large-scale electricitystorage that exists in New England today.

If electricity storage were an essential part of operatng a power system with significantamounts of wind energy, one would expect that pumped-storage hydro utilization wouldincrease with increasing amounts of wind energy. Quite the opposite, the NEWIS studyshowed relatively little increase in the use of existing pumped-storage hydro. NEWIS

tn Wan at page 16.20 Final Report: New England Wind Integration Study, Prepared for ISO New England, Prepared by GEEnergy Applications and Systems Engineering, EnerNex Corporatiorg and AWS Truepower. December 5,2010. Available at http://iso-ne.comi comm ittees/comm:rvkgrpslprtcpnts:comm/paclreports/20 I 0r'newis:report.pdf21 ln February 2011, wind produced l7o of the total electricity generated in New England. ln the state ofMaine that figure rises to an impressive 7.9o/". See U.S. EIA, Electric Power Monthly, May 201 I Edition,Tables 1.6.4 and l.l7.A.ttNEWIS page2a5.

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Page 11 Development Permit DP 4889Direct Testirnony of Abigail Krich

June 10" 201 I

found that the required balancing of net load (load minus wind generation) was provided

adequateiy by the flexibility of the existing generation fleet. Further, the wind generation

had the effect of reducing the price dlfferential between on-peak and off-peak pricing,reducing the opportunities for market arbitrage.23

With 20% ofNew England's ensrgy provided by wind power, NEWIS found NOxernissions would be reduced by approximatnly 26Yo, SOx emissions reducedby 6a/o,and

COz emissions reducedby 25%.24 As shown in Figure 3, at low levels of windpenetration wind would offset carbon dioxide emissions in proportion with the windlevels. As wind penetration levels rise, the carbon dioxide emission reductions actuallygrow faster than the wind levels.

2.5%

9%

14Yo

2A%

24%

?.50k

9Yo

17o/o

254/o

30%

',i 1;;':i i'1rr:, ii,i;,:r;t rli i:i,i i. lit:"i: ii:l:1. !,.;ri;:.:!i';it;r:t]"" irl

This is consistent with an independent scientific study performed by the NationalAcademy of Science. This 2007 report estimates that onshore wind energy developmentwill contribute about l.2Ya to 4.5Yo of lJ.S. electricity generation h2020" Based on thisprojection, the study gives a potential range of COz emissions offsets of 3.8% ts 7 .loh afprojected emissions fiom electricity generation units.26

ISO-NE Economic Study 2010

In 2010ISO-NE elected to perform an economic study looking at eleven differenthypothetical future scenarios for the year 203A.27 A comparison of two base case

scenarios, which differ only by the addition of 1,500 MW of new efihcient natural gas

t'NEwls page 33.?tNEWIS page26.2'NEWEEP slide 28-26 Environmental Impacts of Wind-Energy Projects, Committee on Environmental lmpacts of Wind EnergrProjects, National Research Council of the National Academies,2007 . Pages 64-65. Available at:

hnp:i/books.nap.edu/catalog.php?recor 93 5

" 20lO Economic Study Preliminary Results avaiiable in the PAC materials for March 16,?:A11 available

at http : // i so - ne. c om/c o m m i ttee s/cornm:wkg rpsi p

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Page 12 Development Permit DP 4889Direct Testimony of Abigail Krich

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combined cycle units in one and the addition of 4,170 MW of wind in the other, provides

some insight into the impacts of additional wind in the New England region.

In the wind case, the average annual energy market clearing price decreased byapproximately $2/Iv{Wh.2E The annual New England production cost was found todeirease from about $4.9 billion in the g*

"ut" to about $4.2 billion in the wind case.2e

Total annual New England COz emissions resulting frorn electoicity production decreased

from about 54 million tons per year in the gas case to about 48 million tons per year inthe wind case.3o

2* 2010 Economic Study Preliminary Results at slide 38.ze 20lA Economic Study Preliminary Results at slide 40.

'o 20t0 Economic Study Preliminary Results at slide 43.

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Page 13

Conclusion

Development Permit DP 4889Direct Testimony of Abigail Krich

June 10, 201 I

Wind energy in Maine has positive economic and environmental impacts.

Electrical generation and load must be balanced at all times. When wind energy is

produced, it must displace energy that would have been produced by another

source.

Wind has almost no marginal cost for producing electricity once it is built so ittypically acts as a price-taker in the wholesale electricity markets.

Price-taking energy, like wind, displaces more expensive enerry in the markets,

keeping power prices low.Fossil fuels produce the majority of electricity in New England. U'/ind wouldprimarily displace natural gas and oil and increasing amounts of coal electricity as

more wind is installed.

The New England Wind Integration Study (NEWIS) found that no additionalpower plants would be needed to balance the additional variations expected fromup to 12,000 MW of wind energy in New England.

NEWIS found that up to 12,000 MW of wind could be integrated without the

need for additional electrical storage.

NEWIS also found thatif 2AYo of New England's electricity were supplied bywind it would reduce the region's electicity-related CO2 emissions by 25olo, SO*

emissions by 60/o, and NO* emissions by 26%.

Dated: Friday, June 10, 2011

STATE OF MASSACHUSETTSCOTINTY OF MIDDLESEX

The above-named Abigail Krich has made oath and personally attested to me that theforegoing is true and accurate to the best of her knowledge and belief.

Dated: Friday, June 10, 2011

s\

WJESSICA L. NELSON

Ncrtary Pubf,o, Cormonwrelllt d M$88dlus€tb

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